MARKET SNAPSHOT: Stocks Hit Records As IBM Propels Dow Back Above 23,000
Corporate earnings continue to beat expectations
Major indexes hit intraday records and the Dow industrials returned above 23,000 on Wednesday as U.S. stocks gained momentum into the afternoon as the latest round of corporate earnings continued to support the market.
What are the main benchmarks doing?
The Dow Jones Industrial Average climbed 164 points, or 0.7%, to 23,162. The S&P 500 index rose 5 points, 0.2%, to 2,563 and the Nasdaq Composite gained 9 points, or 0.1%, to 6,632.
Recent trading has had a pronounced upside bias. The Dow is on track for its fourth straight daily rise, as well as its 13th gain of the past 16 trading days. The S&P is set for its fourth straight daily gain, as well as its 14th positive session of the past 17.
See:Dow 23,000 marks fresh history for blue chips (http://www.marketwatch.com/story/dow-23000-marks-fresh-history-for-blue-chips-2017-10-17)
Don't miss:Retail investors see this as the 'best time ever' to jump into stocks. Time to worry? (http://www.marketwatch.com/story/retail-investors-see-this-as-the-best-time-ever-to-jump-into-stocks-time-to-worry-2017-10-18)
What are strategists saying?
"So far, earnings have beat expectations. I think that the most important thing economically that has happened this year is the clear, sustainable recovery occurring in Europe. We're getting confirmation of that with almost every economic release. Europe is creating more demand for goods from China which is helping China, so we have the U.S., Europe and China in a synchronized recovery. Economic data globally is confirming positive earnings trends," said Maris Ogg, president of Tower Bridge Advisors.
"IBM had great numbers, and people think the stock is undervalued. It seems to have a turnaround in progress, no doubt about that. The stock probably got oversold due to too much negativity," said Wayne Kaufman, chief market analyst at Phoenix Financial Services.
"Overall, earnings are coming in very nicely. Average earnings growth has been 12%, which is way above what people are expecting, though we don't have that big of a sample yet."
Which stocks are key movers?
Shares in International Business Machines Corp.(IBM) jumped 9.7% a day after the tech giant posted better-than-expected quarterly results (http://www.marketwatch.com/story/ibm-stock-up-after-hours-following-earnings-revenue-beat-2017-10-17). IBM was the Dow average's biggest gainer, set for its biggest one-day percentage gain since 2009.
However, the stock remains down about 4.5% so far this year, having bucked the overall trend in tech names. The tech sector is up more than 25% in 2017 and is the best performer among the primary S&P 500 sectors.
Read more:IBM earnings beat is a product of tax avoidance, and it's nothing new (http://www.marketwatch.com/story/ibm-earnings-beat-is-a-product-of-tax-avoidance-and-its-nothing-new-2017-10-18)
Shares in Fogo de Chão Inc.(FOGO) sank about 8% after the restaurant chain gave a disappointing outlook late Tuesday (http://www.marketwatch.com/story/fogo-de-chao-shares-decline-as-outlook-misses-street-view-2017-10-17).
Abbot Laboratories(ABT) rose 1.8% after it reported its quarterly results.
Financial stocks were big gainers led by Citigroup Inc.(C), Goldman Sachs Group Inc.(GS), and Morgan Stanley(MS).
Allergan PLC(AGN) shares continued to fall, dropping 5% after a Texas district court judge earlier this week ruled against the company in a patent lawsuit (http://www.marketwatch.com/story/allergan-patent-suit-loss-sends-stock-down-5-2017-10-16) regarding the company's billion-dollar dry-eye medication Restasis.
Shares of Electronic Arts Inc.(EA) slid 2.5% following news that the company is shuttering the unit (http://www.marketwatch.com/story/ea-shuts-down-studio-developing-star-wars-game-2017-10-17) that was working on an upcoming "Star Wars" video game.
What could drive markets?
The Fed's Beige Book report, which gathers economic anecdotes from across the U.S. central bank's regional districts, showed that economic growth has ranged from modest to moderate, a report that is unlikely to deter the central bank from normalizing interest-rate policy.
What are data saying about the economy?
A report on the housing industry showed that permits and home starts were both down in September. Permits fell by 4.5% on the month at 1.27 million, while starts fell by 4.7% to 1.13 million, according to the Commerce Department.
What are other assets doing?
European stocks (http://www.marketwatch.com/story/dax-heads-for-new-record-as-euro-slide-helps-exporters-2017-10-18) closed higher, while Asian markets were mixed (http://www.marketwatch.com/story/asian-markets-continue-to-rise-as-chinas-party-congress-starts-2017-10-17) as a key meeting of China's political elite kicked off. Oil futures were moderately higher, while gold futures pulled back (http://www.marketwatch.com/story/gold-futures-build-on-weeks-losses-as-dollar-gains-inflation-risk-in-focus-2017-10-18). The ICE U.S. Dollar Index was mostly flat (http://www.marketwatch.com/story/dollar-lines-up-for-5th-straight-win-2017-10-18).
--Victor Reklaitis contributed to this report.
(END) Dow Jones Newswires
October 18, 2017 14:11 ET (18:11 GMT)